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Fri, Feb 10 2012
Gas emancipation
FREEZE OUT: A gas gauge shows the pressure on a pipeline at German energy giant E.ON’s Hungarian natural gas storage facility in Hajduszoboszlo on January 7 2009, during the cold snap that coincided with the halt in gas deliveries through Ukraine.
Photo: Reuters
Winter is here and Bulgarian businesses are wondering whether they will face a repeat of the events of January 2009, when a halt in natural gas deliveries caused Bulgarian industry to freeze. Judging by the noises coming from Moscow and Kiev, those worries could be justified.
The agreement between Russia and Brussels on the security of gas deliveries cannot relieve the tension in Bulgaria, which is entirely dependent on Russian supplies and can never discount the prospect of a new crisis.
It is then understandable why the state-owned Bulgarian Energy Holding (BEH) is frantically looking for new sources of gas for the domestic market. The other reason is that the consumption of gas, a more environmentally-friendly and efficient fuel, is on the rise in Europe, and Bulgaria plans to keep up with the trend, but for that it needs new sources of supply as well as infrastructure.
US connection
In recent months, BEH has moved forward with its projects to link the Bulgarian gas grid to those of Greece and Romania, along with initiating two new ones – a link to the Serbian grid and deliveries of compressed natural gas from Azerbaijan.
Such moves were expected after the gas crisis in January, but the holding company’s latest decision – to begin drafting, with the help of US consultants, a gas strategy aimed at fully opening Bulgaria’s market and integrating it into a regional market – was not. This ambitious project would not only diminish dependence on Russian gas, but also help liberalise the market and draw Western investors.
BEH executives asked the US Trade and Development Agency (USTDA) to analyse the gas market in Bulgaria and the region, the connections with gas grids in neighbouring countries, investment in storage capacities, terminals for compressed and liquefied natural gas, as well as deliveries from new supply sources.
USTDA experts visited Sofia at the start of November, requesting meetings with representatives of BEH and its subsidiaries, gas company Bulgargaz and grid operator Bulgartransgaz; the Economy Ministry and the utilities regulator; private distribution company Overgas and gas infrastructure firm Gazstroimontazh; US firm Direct Petroleum, which is exploring the Deventsi gas find; Melrose Resources, which manages the Galata field; Jacobs Consultancy, the firm picked to do the study for the planned link-up with the Greek gas grid; and the regional manager of General Electric.
The USTDA personnel also asked to see the Galata and Kavarna fields and the Chiren gas storage facility. According to sources with BEH, the meetings were to test the ground and check on the current state of the sector and the expectations for future development. Should USTDA decide to take on the project, the US agency would finance the drafting of the strategy. BEH expects an answer from USTDA by March 2010.
Full speed to the West
If the two sides reach an agreement, the new gas strategy is expected to be ready by end-2010 at the earliest. The paper would analyse the sector, existing resources and projects, the regulatory framework and gas prices. Concerning the development aspect of the strategy, USTDA offers to analyse the infrastructure, personnel qualifications, technology transfer and the reform of the gas sector, including legislative changes that would open up the market.
The strategy would also include proposals detailing what US goods and services could be used in carrying out gas projects and infrastructure upgrades, as well as the names of US companies that could offer them.
During a visit to the US at the end of November, Bulgarian Foreign Minister Roumyana Zheleva called on US firms to invest in Bulgaria’s energy sector. The topic was discussed during a visit by US special envoy for Eurasian energy, Richard Morningstar, to Sofia.
US firm AES is already among the biggest investors in the field in Bulgaria, investing 1.3 billion euro in a thermal power plant on the Maritza Iztok 1 platform and having completed the 270 million euro St Nikola wind power park, a joint venture with Bulgarian-German firm Geo Power.
The gas sector cannot boast of a similar breakthrough. For years, this was the stomping ground of Russian firms, which explains the slow development. The recent direction taken by BEH on new projects and drafting a new strategy is good news and a chance for Bulgaria’s emancipation from dependence on Russia.
The agreement between Russia and Brussels on the security of gas deliveries cannot relieve the tension in Bulgaria, which is entirely dependent on Russian supplies and can never discount the prospect of a new crisis.
It is then understandable why the state-owned Bulgarian Energy Holding (BEH) is frantically looking for new sources of gas for the domestic market. The other reason is that the consumption of gas, a more environmentally-friendly and efficient fuel, is on the rise in Europe, and Bulgaria plans to keep up with the trend, but for that it needs new sources of supply as well as infrastructure.
US connection
In recent months, BEH has moved forward with its projects to link the Bulgarian gas grid to those of Greece and Romania, along with initiating two new ones – a link to the Serbian grid and deliveries of compressed natural gas from Azerbaijan.
Such moves were expected after the gas crisis in January, but the holding company’s latest decision – to begin drafting, with the help of US consultants, a gas strategy aimed at fully opening Bulgaria’s market and integrating it into a regional market – was not. This ambitious project would not only diminish dependence on Russian gas, but also help liberalise the market and draw Western investors.
BEH executives asked the US Trade and Development Agency (USTDA) to analyse the gas market in Bulgaria and the region, the connections with gas grids in neighbouring countries, investment in storage capacities, terminals for compressed and liquefied natural gas, as well as deliveries from new supply sources.
USTDA experts visited Sofia at the start of November, requesting meetings with representatives of BEH and its subsidiaries, gas company Bulgargaz and grid operator Bulgartransgaz; the Economy Ministry and the utilities regulator; private distribution company Overgas and gas infrastructure firm Gazstroimontazh; US firm Direct Petroleum, which is exploring the Deventsi gas find; Melrose Resources, which manages the Galata field; Jacobs Consultancy, the firm picked to do the study for the planned link-up with the Greek gas grid; and the regional manager of General Electric.
The USTDA personnel also asked to see the Galata and Kavarna fields and the Chiren gas storage facility. According to sources with BEH, the meetings were to test the ground and check on the current state of the sector and the expectations for future development. Should USTDA decide to take on the project, the US agency would finance the drafting of the strategy. BEH expects an answer from USTDA by March 2010.
Full speed to the West
If the two sides reach an agreement, the new gas strategy is expected to be ready by end-2010 at the earliest. The paper would analyse the sector, existing resources and projects, the regulatory framework and gas prices. Concerning the development aspect of the strategy, USTDA offers to analyse the infrastructure, personnel qualifications, technology transfer and the reform of the gas sector, including legislative changes that would open up the market.
The strategy would also include proposals detailing what US goods and services could be used in carrying out gas projects and infrastructure upgrades, as well as the names of US companies that could offer them.
During a visit to the US at the end of November, Bulgarian Foreign Minister Roumyana Zheleva called on US firms to invest in Bulgaria’s energy sector. The topic was discussed during a visit by US special envoy for Eurasian energy, Richard Morningstar, to Sofia.
US firm AES is already among the biggest investors in the field in Bulgaria, investing 1.3 billion euro in a thermal power plant on the Maritza Iztok 1 platform and having completed the 270 million euro St Nikola wind power park, a joint venture with Bulgarian-German firm Geo Power.
The gas sector cannot boast of a similar breakthrough. For years, this was the stomping ground of Russian firms, which explains the slow development. The recent direction taken by BEH on new projects and drafting a new strategy is good news and a chance for Bulgaria’s emancipation from dependence on Russia.
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Appointments
British Council
Lyubov Kostova was appointed country manager of British Council Bulgaria effective January 1, replacing Tony Buckby, who left in October 2011 to take a similar position at British Council Greece. Kostova has been with British Council Bulgaria for 11 years, as public communications manager and, since 2008, as the head of project and partnerships department. Prior to joining the British Council, Kostova was head of international activities at the National Academy for Theatre and Cinema Arts (NATFIZ). She has a degree in Indian studies from Kliment Ohridski Sofia University.
CEZ
Stefan Apostolov is the new chief executive of CEZ Razpredelenie Bulgaria, the power transmission subsidiary of Czech energy company CEZ in the country. He replaces interim chief executive Ales Damm, who remains the chairperson of the CEZ Razpredelenie management board. Apostolov has 30 years of experience in the energy sector, joining CEZ in 2007 as director of customer service and was later appointed as head of business development. Apostolov has a master's degree in electric systems from the Belorussian National Technical University in Minsc, management diplomas from Open University London and New Bulgarian University, as well as a master's degree in business administration from Plovdiv University.
BASF Bulgaria
Valentina Dikanska is the new general manager of chemical industry giant BASF subsidiary in Bulgaria, taking over from Herbert Fisch, BASF vice president for Southeastern Europe. Dikanska, who started her career as an expert in the Finance Ministry, joined BASF Bulgaria as director of finance and administration in 2002. She becomes the first Bulgarian to hold the top management position in the company in its 40-year history on the Bulgarian market. Dikanska holds a master's degree in economics from the University for National and World Economy in Sofia.
Rompetrol Bulgaria
Alexander Albin has been appointed chief executive of fuel distributor Rompetrol Bulgaria, replacing Nichita Sorin, who left to become chief executive of Rompetrol Gaz in Romania. Albin was previously chief executive of Rompetrol Georgia. He has more than 15 years of experience in the oil and gas industry; prior to joining Romania's oil group Rompetrol in 2008 as an adviser, he oversaw operations at Atyrau refinery in Kazakhstan, owned by Rompetrol's parent company KazMunaiGaz. He previously held top management positions at two other leading Kazakh oil and gas companies.
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